Early retirement poses risk to pension fund sustainability: SPF CEO
Muscat – Early retirement remains a major challenge to the sustainability of pension funds in Oman and the Gulf region, according to Dr Faisal bin Abdullah al Farsi, CEO of Social Protection Fund (SPF). He also said that extended provision of job security benefits is straining the fund's reserves.
Speaking at the inaugural session of Communication Dialogue, organised by Government Communication Centre, Farsi emphasised the need for reforms to ensure long-term financial stability. He noted that early retirement is a system unique to the region. 'This system does not exist anywhere in the world except in the sultanate and the Gulf states,' he said, adding that it contributes significantly to financial losses within pension funds.
Farsi stated that the social protection system aims to provide comprehensive care while also supporting economic and social development through targeted policies and programmes. As of February, SPF was supporting over 1.5mn beneficiaries, including the elderly, children, individuals with disabilities, widows, orphans and social security recipients. The number of active insured individuals under SPF across all insurance programmes stood at 590,000.
Regarding job security benefits, Farsi pointed out that extended support for laid-off individuals has significantly affected the fund's financial stability. The benefits were initially meant to last six months but have now been extended for over four years.
While reaffirming SPF's commitment to assisting those affected, Farsi stressed the importance of addressing the root cause of job loss and the need to provide alternative employment.
However, he noted that some individuals have declined job offers despite efforts by authorities to create new opportunities. Under the law, laid-off individuals must be offered at least three job opportunities, and if they reject these, their benefits may be gradually reduced. Farsi encouraged unemployed individuals to actively seek new employment rather than rely solely on financial assistance. He al-so clarified that the minimum job security benefit of RO115 applies only to individuals who have received benefit extensions in recent years. For those recently laid off, benefits are calculated based on the standard mechanism, providing 60% of their wage for six months.
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